The finding makes sense, both in economic and IT management terms. Rather than employing engineers to install and maintain IT systems, a midsized company can train staff to use cloud-based applications required to run the business. For example, a construction firm could train its employees to use a cloud-based project management system, making them more productive and freeing up IT staff for other tasks. This flexibility also saves money on computing costs. David Moore, principal and NetSuite practice leader for Deloitte Consulting LLP, says that companies shifting to the cloud can make more efficient use of their IT staff and resources. “The same people can take on a larger slice of the pie,” Moore says.

The cloud also democratizes IT resources, providing smaller firms access to computing systems and applications that once were the domain of larger corporations with data centers. The survey found more midsized companies taking advantage. Twenty-one percent of respondents said they had mature, successful deployments in place for core applications such as customer relationship management, human resources, and enterprise resource planning. Another 42 percent said they are in the process of deploying cloud-based systems, and 22 percent said they are starting or planning pilot projects for the cloud.

However, not all midsized firms have embraced the shift to cloud computing. Thirty-seven percent of respondents said they see hosting their own systems as the most preferred IT model.

Analytics represents another area of rising interest, as executives at midsized firms work to better understand customers’ behaviors and use those insights to influence customer relationships, marketing, and sales.

Advances in the field are making these companies more comfortable using tools to analyze the growing volume of data flowing into and out of their enterprises. The survey found increases in the use of analytics, with 49 percent of respondents developing predictive analytics models to guide business growth (compared to 29 percent in 2014). Sixty percent said they are using analytics for sales and customer management, while 49 percent said they had implemented marketing analytics applications.

Taken together, these trends toward rising adoption of cloud computing and analytics indicate that, increasingly, business leaders are pulling their IT counterparts into efforts to improve the customer experience, says Stephen J. Keathley, the National Technology Leader for Deloitte Growth Enterprise Services, and a principal with Deloitte Consulting. Forward-thinking companies can establish a partnership between IT and business in order to make this happen, Keathley adds: “It’s about defining the brand, defining how you want to interact with customers, and then executing the plan through technology.”

Proceed with Caution

Amid all the energy for IT enhancements, the study also confirmed that information security remains a significant concern.

Adnan Amjad, a partner with Deloitte & Touche LLP who leads Deloitte’s Vigilant Cyber Threat Management Practice, says a particular worry for midsized firms is providing training to employees to fend off phishing attacks. These are attacks in which hackers attempt to get employees to divulge proprietary information or even write a check by providing details about employees and the company to make them sound legitimate. In response, companies are investing in information security programs to mitigate the risks.

In one case, an employee received emails that purported to be from the company’s CEO. “The treasurer kept getting emails and ended up wiring the money. Someone knew the CEO was not around. By the time the CEO came back, the bank account had been closed, the money had been transferred to another account and that was the end of it,” Amjad says. “Senior executives must be able to understand the potential for threats to cause a business disruption.

1. Survey polled 500 executives at U.S. companies with annual revenues between $50 million and $1 billion. OnResearch conducted the survey from May 29, 2015 to June 16, 2015.

Midmarket Firms Invest in Cloud, Analytics

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